CHHAYA PRAKASHANI LTD.,KOLKATA V. ITO(TDS), WARD 1(2), KOLKATA

ITA 579/KOL/2025

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Chhaya Prakashani Ltd. appealed against the orders of the Commissioner of Income-tax (Appeals) which confirmed the Assessing Officer's decision that payments made for composing charges were to be treated under Section 194J of the Income Tax Act, attracting a higher TDS rate of 10%. The Tribunal examined the nature of the services provided by Publishing Services Pvt. Ltd., with whom Chhaya Prakashani had a contract for composing and DTP work. The Tribunal concluded that these services did not qualify as technical services under the definition provided in Section 194J, thus upholding the assessee's position of deducting TDS at 2% under Section 194C.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783394 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-03-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PANKAJ PANDEY
• Assessee Lawyers: S.K. KAMALAUDDIN
• Keywords: Set aside; TDS
• Section: 133A; 194C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA Nos.579 to 583/KOL/2025 (Assessment Years: 2013-14, 2015-16 to 2018-19) Chhaya Prakashani Ltd. 1, Bidhan Sarani, college Street, Kolkata-700073, West Bengal Vs. ITO(TDS), Ward 1(2) Kolkata, 10B, Middleton Street, 8th floor, Kolkata-700071 West Bengal (Appellant) (Respondent) PAN No. AACCC9925B Assessee by : Shri S.K. Kamalauddin, AR Revenue by : Shri Pankaj Pandey, DR Date of hearing: 14.10.2025 Date of pronouncement: 04.11.2025 O R D E R Per Rajesh Kumar, AM: These are the appeals preferred by the assessee against the order of the Commissioner of Income-tax (Appeals)(hereinafter referred to as the “Ld. CIT(A)”]even dated 31.01.2025 for the AY 2013-14., 2015-16 to 2018-19. 02. The issue involved in all the appeals is similar, therefore, these are clubbed together and disposed of by this consolidate order for the sake of brevity and convenience. First of all, we will take ITA No. 579/KOL/2025, as lead case and facts are discussed in the following paras. 03. The only issue raised by the assessee in the ground of appeal is against the order of ld. CIT (A) confirming the action of the ld. AO in Printed from counselvise.com Page | 2 ITA Nos. 579 to 583/KOL/2025 Chhaya Prakashani Ltd. A.Ys.2013-14, 15-16 to 18-19 holding that the payments made for composing charges are covered u/s 194J and not u/s 194C of the Act . 04. The facts in brief are that a survey action u/s 133A of the Act was conducted in the office premises of the assessee at CG-84/80, Sector- II, Salt Lake, Kolkata-700091. During the course of survey proceedings, the ld. AO noticed that M/s Publishing Services Pvt. Ltd. has been paid an amount of ₹39,42,543/- as composing charges and assessee has accordingly, deducted TDS at the rate of 2% u/s 194C of the Act. The ld. AO during the course of survey confronted the assessee as to why the composing charges should not be treated as technical service and as to why the TDS at the rate of 10% u/s 194J should not be invoked. The assessee submitted that the payments were made to Publishing Services Pvt. ltd. under an agreement with the assessee towards composing services rendered to the assessee by the said publishing agency and are purely in the nature of contract and therefore TDS has been rightly deducted by the assessee u/s 194C of the Act, at the rate of 2%. The contentions of the assessee did not find favour with the AO , and he treated the assessee in default by holding that the Provisions of Section 194J of the Act, are applicable as the assessee is receiving technical services from said agency thereby raising total demand of ₹5,61,419/- including interest u/s 201 (1A) of the Act of ₹2,46,015/-. 05. In the appellate proceedings, the ld. CIT (A) simply affirmed the order of the ld. AO by dismissing the appeal of the assessee. 06. After hearing the rival contentions and perusing the materials available on record, we find that the assessee is engaged in the business of publishing of books mainly education books and sale thereof. For the purpose of composing and DTP work of the assessee Printed from counselvise.com Page | 3 ITA Nos. 579 to 583/KOL/2025 Chhaya Prakashani Ltd. A.Ys.2013-14, 15-16 to 18-19 company, it had entered into a contract with Publishing Services Pvt. Ltd. for typing and DTP jobs on behalf of the assessee, for which manuscripts were provided by the assessee company. The assessee company has entered into an agreement with the said publisher dated 16.09.2011. We have perused the agreement entered into with the publisher/ recipient and also Provisions of Section 194J of the Act and 194C of the Act and found that the printing services are not technical services within the definition as provided in the explanation to Section 194J of the Act. Therefore, the assessee has correctly deducted the tax at source at the rate of 2% from the contractual payments made to Publishing Services Pvt. ltd. Consequently, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the demand raised on account of short deduction of tax at source as the assessee is covered under Section 194C of the Act so far as the deduction of TDS is concerned and not u/s 194J. Accordingly, the appeal of the assessee is allowed. 07. The issue raised in other appeals in ITA Nos. 580 to 583/KOL/2025 are similar to one as decided by us in ITA No. 579/KOL/2025. Accordingly, our decision would, mutatis mutandis, apply to these appeals of assessee in ITA Nos. 580 to 583/KOL/2025. Hence, the appeals of assessee are allowed. 08. In the result, the all the appeals of the assessee are allowed. Order pronounced in the open court on 04.11.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 04.11.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 4 ITA Nos. 579 to 583/KOL/2025 Chhaya Prakashani Ltd. A.Ys.2013-14, 15-16 to 18-19 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "